02 unfair?

We had shares in mm02 and opted to accept the company's cash offer for them in January. We were told that preference would be given to all small shareholders. Now 02 says that only those holding 1,000 shares or less will receive the cash. Were we mislead? PT, London

Hilary Cook at Barclays Stockbrokers replies: mm02's initial press release on 12 January specifically mentioned small shareholders of between 1 and 600 shares - who represented 63.5% of holders by number and only 3.5% of its share capital. Since the cost of paying any future dividend to those holders would likely outweigh the value of the dividend itself, the company incentivised small shareholders to accept the cash offer.

The company's press release on 14th March that they had redeemed shareholders of up to 1000 shares - a higher number than originally indicated. the resultant placing depressed the share price, but it has since recovered back over 120p.

To have sold near 130p would have required the shares to have been sold in a small window around mid Feb (when bid rumours were abounding). The shares have otherwise traded around the 120p to 125p level throughout 2005.